Investment Philosophy

Laurium Capital views Africa as the continent of opportunity and believe in the growing potential of Africa. With over 240 years collective professional investment management expertise, the team at Laurium Capital combines on-the-ground research and extensive local market knowledge to seek investment opportunities. We believe that our skills in stock selection, combined with disciplined portfolio construction and risk management processes should deliver superior risk adjusted returns over time.

All of our funds are underpinned by a common investment philosophy.

Bottom-up fundamental research and valuations – the core of our philosophy:

We seek to identify companies whose share prices differ materially from our estimate of intrinsic value, based on through-the-cycle, normalised cash flows and earnings, and where we think that there is a catalyst for the company’s share price to revert to our estimate of intrinsic value over the medium term. However, when using a valuation-driven stock picking process, we acknowledge the risk of investing in so-called value traps (companies whose share prices trade at prices that differ materially from our estimate of intrinsic value for extended periods of time) and seek to mitigate this risk by focusing on catalysts, downside risk, quality of the company and management team, and taking all of these factors into account when considering portfolio construction.

Top-down views – an important overlay:

Identifying and taking advantage of economic cycles and market trends is an important contributor to the generation of superior long term investment returns, and is complementary to bottom-up research. However, cycles and trends are often unpredictable and are subject to change. Therefore the risk of being wrong must be acknowledged and managed.

Trading – a part of both bottom-up and top-down research:

The market is right most of the time, but regular inefficiencies arise in the short term. Shorter term inefficiencies may present trading opportunities, irrespective of a company’s intrinsic value. These opportunities often arise due to large flows of money, news flow and emotions, structural inefficiencies, corporate actions, and other special situations or events.